UPDATE: Deutsche Bank Reiterates Buy Rating, Raises PT on Guidewire Software
In a report published Wednesday, Deutsche Bank reiterated its Buy rating on Guidewire Software (NYSE: GWRE), and raised its price target from $36.00 to $38.00.
Deutsche Bank noted, “A combination of aging ‘green screen' systems, growing core modules and a sales force incentivized to sell GWRE's full suite anchored by PolicyCenter is helping the company establish beachhead accounts in both the US and overseas. With Aviva UK and Canada, PZU Poland and US tier-1 carrier Nationwide all signed up for Policy, customer reference-ability from marquee customers should help GWRE grow its Policy customer base beyond its current 35 (from 18 last year) out of a total 130 customers, up from 100 at IPO in January 2012. While Policy deployments are typically more complex, pricing is 50%+ higher than the company's traditional Claims product. As Policy projects increase as a share of bookings, we expect an elevated mix of services revenue (at lower margins) for FY13, consistent with the recent couple of quarters. Operating margins and EPS are also likely to stay lower as the company hires more sales and engineering staff to support growth.”
Guidewire Software closed on Tuesday at $29.35.
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